Most US media are now showing positive advertising growth, although this is largely due to the easy comparables of last year rather than a lift in underlying advertising budgets, according to analysts at Merrill Lynch.
The broker believes that this slow recovery will continue, but notes that it is a fragile one, as most ad agencies are not really experiencing much of a pick-up in activity at present.
Figures out this week from CMR showed that in the first half, adspend dropped by 0.2% overall, suggesting that there is virtually no real pick-up, given that H1 2001 was itself so weak (see US First Half Adspend Comes In Flat, According To CMR). Merrill Lynch says that CMR’s estimate of a 6.3% rise in local newspaper adspend is ‘aggressive’, leading it to question the veracity of the other data.
Network television is showing continued strength in spend, where upfront commitments by agencies are on the whole being honoured, with only a 5% cancellation rate (in 2000, 10-15% of holds were dropped). If advertisers are maintaining their commitments, says the broker, it is likely that they are planning on booking new ads.
Radio continues to post mid single-digit gains, against easy comparisons (see ‘Steady And Strong’ Recovery Predicted In June US Radio Figures). Newspapers are now just entering positive growth, but again as against increasingly easy comparisons (see US Newspaper Revenue Down 4.0% In First Half, Says NAA). Magazines are already in positive territory, supporting a cautious optimism in this sector (see US Mags Revenue Rise In July Supports ‘Cautious Optimism’).
Overall recovery to be muted Merrill Lynch says that whilst new product introductions are beginning to emerge and the economy is improving, overall growth is likely to remain muted for some time yet.
